Full House Resorts, Inc. — FY2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023. This is an annual report, not a standalone fourth-quarter filing; the supplied filing text does not provide separate Q4 results. Full House operates seven casinos and contracted sports-wagering businesses across several U.S. states.
Financial performance
| Metric | FY2023 | FY2022 |
|---|---|---|
| Revenue | $241.1 million | $163.3 million |
| Operating income (loss) | $(1.2) million | $12.7 million |
| Net loss | $(24.9) million | $(14.8) million |
| Net loss per share | $(0.72) | $(0.43) |
| Operating cash flow | $22.3 million | $4.4 million |
| Adjusted EBITDA | $48.6 million | $32.1 million |
Revenue rose 47.6%, primarily because temporary American Place opened in February 2023 and contributed $77.0 million. Excluding American Place, consolidated revenue increased only 0.5%. Operating expenses grew faster than revenue, up 60.8%, including higher depreciation and amortization, preopening costs and American Place operating expenses. Adjusted EBITDA is a non-GAAP measure and should not be treated as a substitute for GAAP earnings or cash flow.
Casino revenue was $176.9 million, up 55.4%; food and beverage revenue was $34.0 million, up 28.3%; hotel revenue was $9.4 million, up 1.6%; and other revenue was $20.7 million, up 52.0%. Slot and table-game hold percentages were 7.4% and 18.6%, respectively.
Segments and comparability
- Midwest & South: Revenue increased 60.4% to $192.4 million and Adjusted Segment EBITDA rose 48.0% to $39.0 million, reflecting American Place. Excluding that new property, same-store revenue fell 3.8% and EBITDA fell 21.8%; management cited weaker casino results and higher costs, including insurance and labor.
- West: Revenue declined 0.7% to $35.9 million; Adjusted Segment EBITDA fell 42.9% to $2.4 million. Chamonix construction disruptions, parking costs and adverse Lake Tahoe winter weather weighed on results.
- Contracted Sports Wagering: Revenue increased 78.1% to $12.8 million and Adjusted Segment EBITDA increased 63.6% to $11.7 million. Results included $5.8 million of accelerated revenue following termination of two agreements. Excluding new Illinois activity and termination-related acceleration, same-store revenue declined 14.1% and EBITDA declined 32.2%.
Cash, debt and liquidity
- Cash and equivalents were $36.2 million at year-end; restricted cash was $37.6 million, dedicated to Chamonix construction, for combined cash and restricted cash of $73.8 million.
- Cash used in investing activities was $198.8 million, including $148.6 million of capital expenditures and $50.5 million for intangible assets, principally the American Place gaming license. Financing activities provided $59.0 million.
- Principal debt was $450.0 million of 8.25% senior secured notes due February 2028 and $27.0 million drawn on a $40.0 million revolving facility due March 2026. The company also reported a $2.2 million finance-lease balance. Notes and revolver are secured by substantially all assets. The company reported compliance with its revolving-credit financial covenant at year-end.
- Management believes cash, available revolver capacity and operating cash flows will meet liquidity needs for the next 12 months. It also expects additional financing will likely be needed for the permanent American Place facility. The filing does not provide a definitive total budget or financing plan for that project.
Outlook, developments and risks
- Chamonix began phased operations on December 27, 2023. The spa, rooftop pool and Italian restaurant were still in development; management expected the high-end steakhouse to open in March 2024 and the spa and pool in mid-2024. The company expected to use the $37.6 million restricted balance for remaining Chamonix investment during 2024.
- Temporary American Place opened in February 2023 and is permitted to operate through August 2027. The permanent facility is projected for completion in 2027; meaningful construction spending was expected to be delayed until 2026 or 2027. A lawsuit by an unsuccessful license bidder remains a potential source of delay or financing uncertainty; the filing describes related proceedings and appeals.
- Illinois may require a reconciliation payment calculated after three years of gaming operations. The company recorded a discounted $14.9 million long-term obligation at year-end, in addition to $35.0 million of position fees already paid.
- Grand Lodge’s lease expires December 31, 2024, and the landlord has an option to purchase the casino’s leasehold interest and operating assets. Renewal is not assured.
- Key risks include substantial secured debt and refinancing needs, construction-cost overruns and delays, regional competition and economic sensitivity, weather and access disruptions, rising labor and insurance costs, gaming regulation, and sports-wagering counterparties’ ability to continue operations. The company also disclosed increased credit-loss reserves, including approximately $1.0 million related to two online sports-wagering agreements.
- No dividend is currently paid; debt covenants restrict dividends. The company reported no material cybersecurity incident in the period. The independent auditor issued unqualified opinions on the financial statements and internal control over financial reporting.
Investor items to verify
- Whether Chamonix completes its remaining amenities on schedule and ramps up profitably, including the final project costs and use of restricted cash.
- American Place’s permanent-project budget, timing, funding sources and licensing-litigation developments, as well as the eventual Illinois reconciliation payment.
- Underlying performance at established casinos and contracted sports wagering after excluding American Place, new Illinois activity and accelerated contract-termination revenue.
- Grand Lodge lease renewal or buyout outcome before the December 2024 expiry.
- Cash generation, revolver availability, covenant headroom and the company’s ability to address its 2026 and 2028 debt maturities while funding planned investment.